Forex Investment and Currency Trading

The October employment report was disappointing, on balance, with a 190,000 drop in nonfarm payrolls and a surge in the unemployment rate to 10.2%. The establishment survey (which measures payrolls) painted a slightly better picture of the labor market than the household survey (which measures the unemployment rate). The 190,000 decline in nonfarm payrolls was larger than market consensus (-175,000) expectations, but this was countered by net upward revisions of 91,000 to the prior two months. In addition, there were a few encouraging signs among the components, most notably a 34,000 gain in temporary employment and unchanged government payrolls (which [...]

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The CAD benefited from the rebound in risk appetite and strength in commodity prices yesterday to stage a solid looking turnaround versus the USD – though it should also be noted that the CAD has gained notable ground versus the EUR and JPY over the past couple of days also. It seems that the CAD’s recent period of under-performance may be poised to reverse. With speculative long CAD exposure reduced following the burst of BoC commentary on the CAD late last month, the path for renewed CAD appreciation looks a little clearer. Higher commodity prices should make renewed CAD gains [...]

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The CAD has regained a little ground this morning as risk appetite improves. Oil prices have recovered a little to add to the CAD underpinning but after the recent shake out in equities and with some event risk ahead still – beyond today’s US GDP data, the FOMC meeting next week looms very large – scope for a CAD bounce may be limited at the moment, even if traders also think that the CAD sell off has been overdone after the constant stream of comment from BoC Governor Carney over the past few days. The rebound in the USD has taken [...]

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The soft close in US equities set the scene for a cautious Asian session with regional bourses tumbling across the board (Nikkei -1.83%, HSI -2.28%) and JPY outperforming. However, risk aversion soon evaporated as Europe and London entered the fray with a more upbeat tone and US stock futures began to rally, while government bonds became offered, and commodity driven currencies outperformed across the board (AUD, NOK, NZD).
In terms of data, today’s advance release of US Q3 GDP may well be crucial in setting the general tone heading into month end.
USD/CAD drifted lower overnight. Oil consolidated yesterday’s losses as it [...]

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